Notice Regarding Acquisition of Rights to Battery Energy Storage System and Land

We hereby announce that at a board of directors' meeting held today, we resolved to acquire rights to battery energy storage system (BESS) equipment and related land for a grid-connected BESS project located in Hio-shimo, Nagato City, Yamaguchi Prefecture, as detailed below.

1. Overview of the Acquisition

We have entered into a contract with Craft Corporation to acquire the BESS equipment, land, and associated or related rights for the grid-connected BESS project located in Hio-shimo, Nagato City, Yamaguchi Prefecture.

The purpose of this acquisition is not for us to hold and operate the project long-term, but rather to monetize it after acquisition through transfer to a third party or other means.

2. Reason for the Acquisition

Our core business is the reuse of used smartphones and other information and communication devices. In addition to this, we are exploring opportunities to expand our business in reuse, resale, lifecycle management, and related fields.

In recent years, driven by the expansion of renewable energy adoption and the increasing need for power supply-demand adjustment, demand for grid-connected BESS has been growing, and we recognize this as an area with potential for future growth.

This project is one that we have been considering in relation to AI infrastructure investment and its surrounding areas. We will acquire the BESS equipment, land, and associated rights for the grid-connected BESS project in Hio-shimo, Nagato City, Yamaguchi Prefecture. After comprehensively considering factors such as collaboration with aggregators, revenue from the supply-demand adjustment market, equipment value, and future transferability, we have determined that the project offers a certain level of profitability.

Furthermore, procedures related to grid connection for this project have progressed to a certain extent, and we currently anticipate the handover of the property on October 30, 2026. While grid-connected BESS projects can take a considerable amount of time from the start of development to grid connection and energization, this project is expected to be handed over and commercialized in a relatively short period, making it a valuable business opportunity from the perspectives of capital efficiency and early monetization. It is important to note that this is not a new business of holding and operating grid-connected BESS long-term; rather, it is a transaction aimed at monetization by transferring the acquired assets and rights to a planned transferee.

Based on our current calculations, the main income and expenditure projections for the business plan if we were to hold and operate this project are as follows. The figures below are estimates made by us based on currently available information and certain assumptions to examine the project's profitability, and they do not guarantee future sales, profits, EBITDA, investment recovery, or other performance. Additionally, we anticipate an internal rate of return (IRR) of 11.8% in the business plan if we were to hold and operate this project.

Based on the above income and expenditure projections, we have determined that this project is a business opportunity with a certain level of profitability.

However, if we were to hold and operate this project long-term, in addition to the long-term immobilization of acquisition funds, we would need to establish a new system for BESS operation and maintenance, response to the supply-demand adjustment market, and collaboration with aggregators.

Considering that this project was secured through discussions with the acquiring party, and that the contract needed to be concluded by June 2026 at the acquiring party's request, we have decided to first acquire the rights related to this project.

Subsequently, after comprehensively considering the allocation of funds to existing businesses and growth investments, the medium- to long-term business risks related to new domains, and our current business structure, we have determined that it is more reasonable to monetize the project early through transfer to a planned transferee or other means, rather than holding and operating it long-term.

We are currently in discussions with the planned transferee regarding the transfer of rights related to this project, but as of today, the transfer price, contract terms, and other specific details have not been finalized.

3. Details of Acquired Assets

*The acquisition price will not be disclosed as it may affect the future business activities of the acquiring party. The acquisition price was determined through discussions and negotiations with the acquiring party at a level deemed to provide investment profitability, taking into account the project's expected profitability and IRR.

*Regarding the land, as of today, the transfer of ownership, handover, and registration procedures to us have not been completed, so the current status is listed as "Not Acquired." Part of this land includes parcels that the acquiring party plans to purchase from Nagato City, and after those procedures are completed, ownership transfer, handover, and registration procedures to us are scheduled to take place on October 30, 2026, based on the land sale contract.

*In addition to the BESS equipment and land, the acquisition targets include the contractual status and rights/obligations related to the grid connection application, the right to receive documents required for the name change procedure for connection rights, the status as buyer under the land sale contract and the right to designate the recipient of ownership, and other rights incidental or related to this project.

4. Overview of Acquiring Party

5. Acquisition Schedule

*The BESS equipment is scheduled to be delivered after the completion of installation work, grid connection, testing and adjustments for entry into the supply-demand adjustment market, and inspections.

6. Future Outlook

This acquisition is intended to be monetized through transfer to a third party or other means. The details of such transfer, the transfer price, and the impact on profit and loss are currently under discussion, and we will disclose them promptly once they are decided.

We are currently examining the impact of this acquisition on our company's performance.